M/s Kenchamba & Co, Hassan V. Deputy Commissioner of Income Tax Circle-1 , Hassan

ITA 1432/BANG/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1856 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-11-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Reasonable cause; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. 1432/ BANG / 2018 ASSESSMENT YEAR : 2011 - 12 M/S. KENCHAMBA & CO., KENCHAMBA SERVICE STATION, MAGGE POST, ALUR TALUK. HASSAN DISTRICT 573 146. PAN: AAFFK 9717R VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, HASSAN. APP ELL ANT RESPONDENT APPELLANT BY : SHRI R. CHANDRASHEKAR, ADVOCATE RES PONDENT BY : DR. P. V. PRADEE P KUMAR , ADDL.CI T(DR)(ITAT), BENGALURU. DATE OF HEARING : 13.11 .201 8 DATE OF PRONOUNCEMENT : 16 .11 .201 8 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 30.11.2017 OF THE CIT(APPEALS), MYSORE RELATING TO ASSESSMENT YEAR 2011-12. 2. THE ASSESSEE IS A PARTNERSHIP FIRM CARRYING ON BUSINESS AS IOC DEALERS AND RUNNING RICE MILL. IN THE COURSE OF AS SESSMENT PROCEEDINGS FOR AY 2011-12, THE AO NOTICED THAT THE ASSESSEE WAS UN DER AN OBLIGATION IN TERMS OF SECTION 44AB OF THE INCOME-TAX ACT, 1961 [ THE ACT] TO GET HIS BOOKS OF ACCOUNT AUDITED AND FURNISH REPORT OF SUCH AUDIT ON OR BEFORE THE ITA NO.1432/BANG/2018 PAGE 2 OF 4 SPECIFIED DATE. THE ADMITTED POSITION IS THAT THE ASSESSEE GOT THE BOOKS OF ACCOUNT AUDITED AND FILED THE AUDIT REPORT AFTER TH E SPECIFIED DATE REFERRED TO IN SECTION 44AB OF THE ACT. FAILURE TO FURNISH A R EPORT AFTER THE GETTING THE TAX AUDITED BEFORE THE SPECIFIED DATE INVITES PENAL TY U/S. 271B OF THE ACT. IN TERMS OF SECTION 273B, NO PENALTY SHALL BE IMPOSED IF THE FAILURE TO COMPLY WIT THE PROVISIONS OF SECTION 44AB WAS ON OCCASIONE D OWING TO REASONABLE CAUSE. 3. THE AO INITIATED PENALTY PROCEEDINGS U/S. 271B O F THE ACT. THE ASSESSEE DID NOT APPEAR IN RESPONSE TO THE SHOW CAU SE NOTICE U/S. 271B OF THE ACT AND THEREFORE THE AO PROCEEDED TO IMPOSE PE NALTY ON THE ASSESSEE U/S. 271B OF THE ACT BY HIS ORDER DATED 22.03.2016. 4. AGGRIEVED BY THE AFORESAID ORDER, THE ASSESSEE H AS PREFERRED APPEAL BEFORE THE CIT(APPEALS). IT APPEARS THAT TH E APPEAL OF THE ASSESSEE WAS FIXED BEFORE THE CIT(APPEALS) ON 27.11.2017 AND AT THE REQUEST OF THE ASSESSEE, THE CASE WAS ADJOURNED TO 27.11.2017. IT APPEARS THAT ON 27.11.2017, NONE APPEARED ON BEHALF OF THE ASSESSEE . THE CIT(APPEALS) THEREFORE PROCEEDED TO DECIDE THE APPEAL OF THE ASS ESSEE EX PARTE . THE CIT(APPEALS) FOUND THAT THE REASON GIVEN FOR FAILUR E TO COMPLY WITH THE PROVISIONS OF SECTION 44AB OF THE ACT WAS THE SICKN ESS OF THE PERSON WHO WAS ENTRUSTED WITH THE WORK OF ACCOUNTS. SINCE NO SUPPORTING EVIDENCE WAS FILED BY THE ASSESSEE, THE CIT(APPEALS) WAS OF THE VIEW THAT THERE WAS NO REASONABLE CAUSE FOR THE FAILURE AND HE THEREFOR E CONFIRMED THE ORDER OF THE AO IMPOSING PENALTY ON THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASSE SSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. AFTER HEARING THE RIVAL SUBMISSIONS, WE ARE OF T HE VIEW THAT THE ORDER OF THE CIT(APPEALS) HAS TO BE SET ASIDE AND THE ISS UE REMANDED TO THE ITA NO.1432/BANG/2018 PAGE 3 OF 4 CIT(APPEALS) FOR FRESH CONSIDERATION. THE LD. COUN SEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT NECESSARY EVIDENCE REGARDI NG SICKNESS OF THE ACCOUNTANT OF THE ASSESSEE IS AVAILABLE AND COULD N OT BE PRODUCED BEFORE THE CIT(APPEALS). IT WAS SUBMITTED BY HIM THAT IT WAS DUE TO ILLNESS OF THE PARTNER THAT THERE WAS NO PROPER REPRESENTATION BEF ORE THE CIT(APPEALS). WE ACCEPT THE STATEMENT MADE ACROSS THE BAR BY THE LD. COUNSEL FOR THE ASSESSEE AND SET ASIDE THE ORDER OF THE CIT(APPEALS ) AND REMAND FOR FRESH CONSIDERATION BY THE CIT(APPEALS) THE EXISTENCE OF A REASONABLE CAUSE FOR FAILURE U/S. 44AB OF THE ACT AND OTHER LEGAL OR FAC TUAL ISSUES THAT MAY BE RAISED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF NOVEMBER, 2018. SD/- SD/- ( INTURI RAMA RAO ) ( N. V. VASUDE V AN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 16 TH NOVEMBER, 2018. / D ESAI S MURTHY / ITA NO.1432/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APP ELL ANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUA RD F ILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.